Background of the Case

On June 23, 2016, The Securities and Exchange Commission (“SEC” or the “Commission”) issued an Order against Ross, Sinclaire, & Associates, LLC (“RSA”), a registered broker-dealer, and Murray Sinclaire, Jr. (“Sinclaire”), RSA’s president and CEO (collectively, the “Respondents”). According to the Order, from at least January 2007 through December 2012 (the “Relevant Period”), the Respondents allowed Nicholas L. Fry II (“Fry”), president of registered investment adviser Fry Hensley and Company (“FHC”), to take advantage of his close relationship with RSA to carry out a fraudulent scheme whereby Fry charged his advisory clients inflated commissions (“Inflated Transaction Commissions”) through RSA.

The Order found that during the Relevant Period, RSA permitted Fry to be involved in effecting equity securities trades through various transaction charges for FHC clients at RSA, despite knowing that Fry did not have the required license to do this work. The Respondents permitted Fry and FHC to directly benefit from the higher charges by paying Jane Fry, Fry’s spouse, half of the transaction charges that RSA collected on Fry’s equity trades; RSA also benefited by keeping the other half of the transaction charges. As a result of the Respondents’ conduct, the Order found that RSA violated Section 15(b) (7) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 15b7-1 thereunder and Sinclaire willfully aided and abetted and caused RSA’s violations of Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder. In the Order, RSA was ordered to pay $703,335.16 in disgorgement, $99,239.54 in prejudgment interest, and a $100,000.00 civil money penalty and Sinclaire was ordered to pay a $50,000.00 civil money penalty to the Commission. The Order provided that the payments were to be made over a period of one year within the entry of the Order.

Plan of Allocation

The amount available for distribution is $959,156.13, less taxes and fees (“Net Available Fund”).

The Net Available Fund will be allocated to Eligible Claimants on a pro rata basis based on their Recognized Loss. The Recognized Loss for each Eligible Claimant will be calculated as follows:

(a) The Distribution Agent will total the Transaction Charges for each claimant.

(b) The Distribution Agent next will add the Net Amount for each Eligible Claimant to get a total Net Amount for all Eligible Claimants combined.

(c) If the total Net Amount exceeds the Net Available Fund, the Distribution Agent will determine what percentage of the total Recognized Loss is represented by each Eligible Claimant’s Net Amount. The resulting percentage for each Eligible Claimant is the claimant’s pro rata share (“Pro Rata Share”).

(d) The Distribution Agent will multiply the Net Available Fund by each Eligible Claimant’s Pro Rata Share to determine their Distribution Payment.